Hipple v. Matrix Absence Management, Inc. et al

Filing 23

ORDER Denying Plaintiff's 19 Motion to File First Amended Complaint. Signed by District Judge Matthew F. Leitman. (Monda, H)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
PAUL HIPPLE,
Plaintiff,

Case No. 13-cv-11059
Hon. Matthew F. Leitman

v.
MATRIX ABSENCE
MANAGEMENT, INC. et al.,
Defendants.
____________________________/
ORDER DENYING PLAINTIFF’S MOTION TO FILE
FIRST AMENDED COMPLAINT (ECF #19)
On March 8, 2013, Plaintiff Paul Hipple (“Hipple”) filed the instant action
against Matrix Absence Management, Inc. (“Matrix”), Denso International
America, Inc. (“Denso”), and the Denso Health & Welfare Plan (the “Plan”)
(collectively, the “Defendants).

In his Complaint, Hipple alleged that Matrix

wrongly denied his claim for short-term disability (“STD”) benefits on the ground
that Hipple was not a participant in the Plan on the date of his disability. (See
Complaint, ECF #1.)

On June 13, 2014, entered an Opinion and Order (1)

vacating Matrix’s final determination denying STD benefits to Hipple and (2)
remanding the matter to Matrix for an additional review of Hipple’s claim to
determine whether he otherwise qualified for STD benefits. (See Opinion and
Order, ECF #17.) On July 21, 2014, the parties settled Hipple’s claim for STD

benefits, thereby resolving – in its entirety – Hipple’s Complaint. (See Motion to
Amend Compl., ECF #19 at 7, Pg. ID 929.)
On July 22, 2014 – the day after the parties agreed to settle Hipple’s STD
claim – Hipple filed the instant Motion seeking leave to amend his Complaint to
add both a new claim and a new party. (See id.; Reply Brief, ECF #22 at 1-2, Pg.
ID 996-97.)

Specifically, Hipple seeks to add a claim that Defendants and

Reliance Standard Life Insurance Company (“Reliance Standard”) (the claims
administrator for Denso’s long-term disability (“LTD”) plan, which was not named
as a party in the Complaint) wrongfully denied his application for LTD benefits.
(See Mot. to Amend Compl. at 7, Pg. ID 929; Response Br., ECF #21 at 6, Pg. ID
987; Reply Brief at 4, Pg. ID 996.)
Hipple filed his application for LTD benefits with Matrix “sometime during
July 2013.” (Mot. to Amend Compl. at 3, Pg. ID 925.) Matrix and/or Reliance
Standard denied the application on September 30, 2013, on the same ground that
Matrix had denied his application for STD benefits – namely, that Hipple was not a
participant in the Plan on the date of his disability. (See LTD Denial Letter, ECF
#19-2.) Hipple appears to admit in his Motion that he did not file an administrative
appeal of the denial of his LTD claim. (See Mot. to Amend Compl. at 3-7, Pg. ID
925-29.) However, Hipple asserts in his Reply Brief (for the first time and in
apparent contradiction to the position he takes in his Motion) that he did attempt to
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appeal the denial of his LTD benefits on March 14, 2014 – the final day of the
appeal period – but he sent his appeal to an incorrect address. (See Reply Br. at 12, Pg. ID 996-97.)
When considering whether to grant a motion to amend a pleading under
Federal Rule of Civil Procedure 15(a), the Court must consider many factors,
including “[u]ndue delay in filing, lack of notice to the opposing party, bad faith by
the moving party, repeated failure to cure deficiencies by previous amendments,
undue prejudice to the opposing party, and futility of amendment.” Wade v.
Knoxville Utilities Bd., 259 F.3d 452, 458 (6th Cir. 2001) (quoting Head v. Jellico
Hous. Auth., 870 F.2d 1117, 1123 (6th Cir. 1989)). “When a party seeks to amend
its complaint at a late stage of the litigation, ‘there is an increased burden to show
justification for failing to move earlier.’”

Szoke v. United Parcel Service of

America, 398 Fed. App’x 145, 153 (6th Cir. 2010) (unpublished opinion) (quoting
Wade, 259 F.3d at 459). Indeed, “[a]lthough Rule 15(a) indicates that leave to
amend shall be freely granted, a party must act with due diligence if it intends to
take advantage of the Rule’s liberality.” U.S. v. Midwest Suspension and Brake, 49
F.3d 1197, 1202 (6th Cir. 1995) (citing Troxel Mfg. Co. v. Schwinn Bicycle Co.,
489 F.2d 968 (6th Cir. 1973)). In this case, Hipple has failed to act with the
requisite diligence and has failed to show that Defendants would not be prejudiced
by the proposed amendment, and for those reasons, the Court DENIES his Motion.
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Matrix and/or Reliance Standard denied Hipple’s LTD application on
September 30, 2013. (See LTD Denial Letter.) Hipple then delayed nearly six
months before (allegedly) submitting his appeal to an incorrect address on March
14, 2014. (See Reply Br. at 1-2, Pg. ID 996-97.) This Court did not rule on
Hipple’s claim for STD benefits until June 13, 2014. Thus, Hipple had more than
eight months between the denial of his LTD claim and the date that this Court
disposed of his STD claim to file his administrative appeal related to the LTD
denial and to then seek leave to add the LTD-related claim to this action. Instead
of acting within that ample time period, Hipple waited to file his Motion until after
the Court granted him relief on the sole basis of his Complaint (i.e., his STD claim)
– and, indeed, until after Defendants had settled that claim. Hipple offers no
sufficient excuse for waiting until this stage of the litigation to file his Motion.1
Hipple simply has not satisfied his “increased burden” to demonstrate why he did
not move to amend at an earlier stage of litigation. See Szoke, 398 Fed. App’x at
153.

1

Hipple argues that, to the extent that he did not timely appeal the initial denial of
his LTD claim, “it would have been futile” to do so, given Matrix’s repeated denial
of his STD claim on the same grounds. (See Mot. to Amend Comp. at 4, Pg. ID
926.) However, this argument does not explain why he failed to seek relief from
this Court with respect to his LTD claim at an earlier stage of this litigation. If, as
Hipple claims, an administrative appeal “would have been futile,” then he had
every reason to join his LTD claim in this case when he received notification of the
initial denial – more than 10 months ago.
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Allowing amendment at this time – after the parties have settled the sole
cause of action in Hipple’s Complaint – would cause substantial prejudice to
Defendants Matrix, Denso, and the Plan. Parties settle cases to end litigation and
eliminate additional risk. Allowing Hipple to re-open this case after Defendants
have done just that would deprive Defendants of one important benefit of their
settlement. See, e.g., Duggins v. Steak ‘N Shake, Inc., 195 F.3d 828, 834 (6th Cir.
1999) (affirming denial of leave to amend pleadings where district court found that
amendment “would deprive the defendants of their anticipated ‘closure’”).
Finally, Hipple has failed to show that permitting his proposed amendment
would not be futile, as his action for LTD benefits would face significant hurdles in
light of his admission that he either (1) failed to exhaust his administrative
remedies or (2) mistakenly sent his appeal – on the last possible day – to an
incorrect address.

The Court will not grant leave to amend under these

circumstances.
CONCLUSION
For the reasons set forth above, IT IS HEREBY ORDERED THAT
Hipple’s Motion (ECF #19) is DENIED.
s/Matthew F. Leitman
MATTHEW F. LEITMAN
UNITED STATES DISTRICT JUDGE
Dated: August 11, 2014

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I hereby certify that a copy of the foregoing document was served upon the parties
and/or counsel of record on August 11, 2014, by electronic means and/or ordinary
mail.
s/Holly A. Monda
Case Manager
[phone]

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